California Real Estate Quiz Questions

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  • 1/33 Questions

    The only person who can pay compensation to a real estate salesperson for real estate activities is:

    • The seller
    • The buyer
    • His or her employing broker
    • The escrow company only when escrow closes
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About This Quiz

This California Real Estate quiz assesses knowledge of state-specific real estate laws, focusing on the roles and responsibilities of real estate professionals, legal compliance, and ethical considerations in property management and transactions.

California Real Estate Quiz Questions - Quiz

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  • 2. 

    An agent promised his buyer a 7.5% loan, but at close of escrow pressured the buyer to accept an 8% loan. The buyer gave in to the agent's pressure and accepted the 8% loan. The agent's conduct was:

    • Legal

    • Illegal

    • Usual

    • Unusual

    Correct Answer
    A. Illegal
    Explanation
    The agent's conduct was illegal because promising a 7.5% loan and then pressuring the buyer to accept an 8% loan is a breach of contract. The agent did not fulfill their promise and coerced the buyer into accepting less favorable terms. This goes against the principles of fair dealing and honesty in business transactions.

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  • 3. 

    After a broker reconciles his client trust account, the broker's client liabilities should match the trust account:

    • Overages

    • Shortages

    • Balance

    • Fidelity bond

    Correct Answer
    A. Balance
    Explanation
    After a broker reconciles his client trust account, the broker's client liabilities should match the trust account balance. This means that the total amount owed to clients should be equal to the total amount held in the trust account. If there are any overages (excess funds) or shortages (insufficient funds), it would indicate a discrepancy in the account and would require further investigation and corrective action. The mention of fidelity bond in the options is unrelated to the reconciliation process and does not affect the matching of client liabilities with the trust account balance.

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  • 4. 

    A licensed real estate sales person is directly responsible to the:

    • Seller

    • Buyer

    • Employing broker

    • None of the above

    Correct Answer
    A. Employing broker
    Explanation
    A licensed real estate salesperson is directly responsible to the employing broker because they work under their supervision and guidance. The employing broker is responsible for overseeing the salesperson's activities, ensuring they comply with laws and regulations, and providing support and training. The salesperson acts as a representative of the employing broker and their interests, working to facilitate real estate transactions on their behalf. Therefore, the employing broker holds the ultimate responsibility for the salesperson's actions and performance.

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  • 5. 

    How long must a real estate salesperson keep a copy of his employment contract with the broker, after quitting the office?

    • One year

    • Two years

    • Three years

    • Four years

    Correct Answer
    A. Three years
    Explanation
    A real estate salesperson is required to keep a copy of his employment contract with the broker for three years after quitting the office. This is important for legal and documentation purposes, as it ensures that both parties have access to the terms and conditions of their agreement during this period. By keeping the contract for three years, the salesperson can refer back to it if any disputes or issues arise regarding their employment with the broker. This timeframe allows for sufficient time to address any potential concerns or claims that may arise after leaving the office.

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  • 6. 

    The word "ethics," when used in a discussion of real estate agents, most nearly means:

    • Trust and honesty

    • The values that guide an agent's relationship with customers, other agents, and the general public

    • Knowledge of the law

    • Held in highest esteem by other agents

    Correct Answer
    A. The values that guide an agent's relationship with customers, other agents, and the general public
    Explanation
    The word "ethics" refers to a set of moral principles and values that guide a person's behavior and decision-making. In the context of real estate agents, ethics would encompass the values that govern their relationships with customers, other agents, and the general public. This includes principles such as trust, honesty, fairness, and respect. Ethics play a crucial role in maintaining professionalism and integrity within the real estate industry, ensuring that agents act in the best interests of their clients and adhere to legal and ethical standards.

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  • 7. 

    Which of the following is a correct statement about puffing?

    • Puffing is always illegal

    • Puffing is unethical unless it is approved by the broker

    • Puffing is only an opinion of value of a specific property as of a given date

    • Puffing is considered misrepresentation if a reasonable person would consider it a statement of fact, rather than opionion

    Correct Answer
    A. Puffing is considered misrepresentation if a reasonable person would consider it a statement of fact, rather than opionion
    Explanation
    Puffing - when a real estate licensee exaggerates the feature of a property or the location in an ad by giving an opinion as part of the sales process

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  • 8. 

    When a real estate licensee is required to take 45 hours of continuing education courses to renew his or her license, included within the 45 hours of courses must be which of the following?

    • Agency, Ethics, Trust Fund Handling and Fair Housing

    • Risk Management

    • 18 hours of consumer protection

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    The correct answer is "all of the above." When a real estate licensee is required to take 45 hours of continuing education courses to renew their license, they must include Agency, Ethics, Trust Fund Handling, Fair Housing, Risk Management, and 18 hours of consumer protection within those 45 hours.

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  • 9. 

    When a real estate broker hires an unlicensed person for the purpose of creating advertising material the broker must:

    • Allow the unlicensed person to create the advertisement to as he or she sees fit

    • Read and approve all material before it is used

    • Approve the material in writing before it is used

    • Approve the material him or herself and only use the unlicensed person to fine-tune the material

    Correct Answer
    A. Read and approve all material before it is used
    Explanation
    The correct answer is "read and approve all material before it is used." This is because real estate brokers have a legal responsibility to ensure that all advertising materials are accurate and comply with relevant laws and regulations. By reading and approving all material before it is used, the broker can ensure that the content is appropriate and meets the necessary standards. This helps to protect both the broker and the consumers involved in the real estate transaction.

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  • 10. 

    What will the Bureau of Real Estate do if someone is attempting to renew a real estate license and his name appears on a list of persons who have not complied with the court order to provide child-support payments?

    • Renew as a suspended license until paid

    • Renew as a temporary license, but the debt must be paid within 150 days

    • Renew for only one year, unless a licensee submits a letter from D.A. that the debt has been paid

    • The license cannot be renewed until the debt is paid

    Correct Answer
    A. Renew as a temporary license, but the debt must be paid within 150 days
    Explanation
    If someone is attempting to renew a real estate license and their name appears on a list of persons who have not complied with the court order to provide child-support payments, the Bureau of Real Estate will renew their license as a temporary license. However, the individual must pay off the debt within 150 days. This means that they will have a limited time period to resolve their child-support payment issue before their license is affected.

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  • 11. 

    When an agent withholds a new listing from other agents and/or the MLS in order to attempt to sell the listing herself, it is considered unethical and described as:

    • Commingling

    • A pocket listing

    • Making a secret profit

    • The fiduciary duty of the agent

    Correct Answer
    A. A pocket listing
    Explanation
    When an agent withholds a new listing from other agents and/or the MLS in order to attempt to sell the listing herself, it is considered unethical and described as a pocket listing. This practice involves keeping the listing "in the agent's pocket" rather than making it widely available to other agents and potential buyers. By doing so, the agent limits competition and potentially reduces the chances of getting the best offer for the seller. This behavior goes against the principles of fairness and transparency in the real estate industry.

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  • 12. 

    A real estate licensee misrepresented his relationship with a large real estate firm in order to impress a prospective buyer. The agent's action would be considered:

    • Appropriate business practice

    • Legal, but unethical

    • Illegal

    • Legal only if a sale results from his relationship with the buyer

    Correct Answer
    A. Illegal
    Explanation
    The real estate licensee's action of misrepresenting his relationship with a large real estate firm in order to impress a prospective buyer is considered illegal. Misrepresentation is a violation of the law and can lead to legal consequences. It is important for real estate professionals to maintain honesty and integrity in their dealings to protect the interests of all parties involved.

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  • 13. 

    Which of the following contracts or documents does not require approval by the Bureau of Real Estate prior to use?

    • An advance fee contract

    • A mortgage loan disclosure statement

    • A real property security disclosure statement

    • An employment agreement between broker and salesperson

    Correct Answer
    A. An employment agreement between broker and salesperson
    Explanation
    An employment agreement between a broker and a salesperson does not require approval by the Bureau of Real Estate prior to use. This is because an employment agreement is a private contract between two parties and does not directly involve any real estate transactions or financial disclosures. The Bureau of Real Estate is primarily concerned with regulating real estate contracts and documents that have a direct impact on the buying, selling, or financing of real property.

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  • 14. 

    The real estate law views the salesperson employed by a real estate broker as:

    • An independent contractor

    • A special agent

    • A sub agent

    • An employee

    Correct Answer
    A. An employee
    Explanation
    The real estate law considers the salesperson employed by a real estate broker as an employee. This means that the salesperson works directly for the broker and is subject to their control and supervision. As an employee, the salesperson is entitled to certain benefits and protections, such as minimum wage, overtime pay, and workers' compensation. This classification also implies that the broker is responsible for the actions and conduct of the salesperson while they are performing their duties.

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  • 15. 

    Mr. Navarro does not have a real estate license. He runs an investment firm, advertising and selling properties for his clients. Since these transactions require a real estate license, who will prosecute him for this criminal violation of the real estate law?

    • The local police

    • The Real Estate Commissioner

    • The State Attorney General

    • The District Attorney of the county in which the activity occurred

    Correct Answer
    A. The District Attorney of the county in which the activity occurred
    Explanation
    The District Attorney of the county in which the activity occurred would be responsible for prosecuting Mr. Navarro for the criminal violation of real estate law. The local police may be involved in the investigation, but it is ultimately the District Attorney's role to bring charges and prosecute the case. The Real Estate Commissioner may handle administrative actions or disciplinary measures, but they do not have the authority to prosecute criminal violations. The State Attorney General may be involved in certain cases, but the District Attorney would typically handle the prosecution at the county level.

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  • 16. 

    Is a broker allowed to keep broker records electronically?

    • Yes, but the broker must regularly transmit the data to the BRE

    • Yes, but the broker has to provide hardcopies to the BRE upon request at the broker's expense

    • Yes, but the broker must back up data annually

    • No, the broker must always retain the original paper documents

    Correct Answer
    A. Yes, but the broker has to provide hardcopies to the BRE upon request at the broker's expense
    Explanation
    A broker is allowed to keep broker records electronically, but they are required to provide hardcopies to the BRE (Bureau of Real Estate) upon request. This means that while electronic records are permitted, the broker must be prepared to provide physical copies of the records if requested by the BRE. The cost of providing these hardcopies is the responsibility of the broker.

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  • 17. 

    Upon going to work for a real estate broker, Janet, a licensed real estate salesperson, advertised in the newspaper that anyone who bought a property through her would receive a free microwave oven valued at $300. Her offer is:

    • Legal, as long as full disclosure is made to all interested parties

    • Legal, provided that only a chance to win the microwave in a drawing is actually given the buyer

    • Illegal under all circumstances

    • Illegal, since the value of such a gift cannot exceed $200

    Correct Answer
    A. Legal, as long as full disclosure is made to all interested parties
    Explanation
    Janet's offer is legal as long as she discloses the offer of a free microwave oven valued at $300 to all interested parties. This means that she must inform potential buyers about the offer before they make a decision to purchase a property through her. As long as she is transparent about the offer, it is allowed within the legal boundaries of real estate sales.

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  • 18. 

    The California Real Estate Commissioner has the authority to:

    • Assess damages against real estate licensees who engage in fraudulent activities

    • Promulgate rules and regulations to promote the enforcement of the California real estate laws

    • Issue non-resident real estate licenses to states which prohibit their residence from holding California real estate licenses

    • All of the above

    Correct Answer
    A. Promulgate rules and regulations to promote the enforcement of the California real estate laws
    Explanation
    The California Real Estate Commissioner has the authority to promulgate rules and regulations to promote the enforcement of the California real estate laws. This means that the commissioner has the power to create and implement rules and regulations that help ensure that the laws governing real estate in California are followed and enforced. This authority allows the commissioner to establish guidelines and procedures that real estate licensees must adhere to, in order to maintain the integrity and professionalism of the industry.

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  • 19. 

    A broker advertises the sale of "Mega-Buck Trust Deeds" in a newspaper. In the ad, the broker offers a specific yield arrived at by looking at the yield for the past year. This ad is:

    • Not subject to regulation under the law

    • Legal only if the BRE has confirmed the yield

    • Legal if the ad also gives the actual interest rate specified in the note and the discount from the outstanding principal balance

    • Illegal according to the Truth-in-Lending Law

    Correct Answer
    A. Legal if the ad also gives the actual interest rate specified in the note and the discount from the outstanding principal balance
    Explanation
    The ad is legal if it also provides the actual interest rate specified in the note and the discount from the outstanding principal balance. This ensures that potential buyers have all the necessary information to make an informed decision about the investment.

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  • 20. 

    An unlicensed employee of the broker who is authorized in writing by the broker may make withdrawals from the broker's trust account provided the employee:

    • Maintains no personal funds in the trust account

    • Is covered by a fidelity bond for at least the amount of the funds to which the employee has access to at any given time

    • Has committed to get a real estate license within the next six months

    • Has been employed by the broker for at least two out of the last five years

    Correct Answer
    A. Is covered by a fidelity bond for at least the amount of the funds to which the employee has access to at any given time
    Explanation
    An unlicensed employee of the broker can make withdrawals from the broker's trust account if they are covered by a fidelity bond for at least the amount of the funds they have access to. This ensures that in case of any mishandling or misappropriation of funds, there is financial protection in place to compensate for any losses. The fidelity bond serves as a safeguard and provides assurance that the employee will handle the funds responsibly and in accordance with the necessary regulations.

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  • 21. 

    When an applicant passes the state exam, how much time does he or she have to apply for the license?

    • One year from the exam date

    • One year from the date they receive the results of the exam

    • Two years from the date of the exam

    • Two years from the date they receive the results of the exam

    Correct Answer
    A. One year from the exam date
    Explanation
    After passing the state exam, the applicant has a time limit of one year to apply for the license.

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  • 22. 

    Which of the following is commingling and also violates the law regulating trust funds?

    • A broker put the tenant's security deposit in his client trust account for tenant, and the broker owns the apartment building being managed

    • A broker put a buyer's deposit in the broker's general account

    • A broker put the tenant's security deposit in his client trust account and the broker's client owns the apartment building being managed

    • A broker put the rent he collected in his client trust account and the broker's client owns the apartment building being managed

    Correct Answer
    A. A broker put a buyer's deposit in the broker's general account
    Explanation
    Commingling is when an agent mixes a principal's or client's money with the agent's own money

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  • 23. 

    The seller in a real estate transaction decided not to pay the commission to his real estate agent. Which of the following should the real estate agent do?

    • File a vendor's lien on the seller's property

    • File a complaint with the Real Estate Commissioner

    • File an action in civil court

    • All of the above

    Correct Answer
    A. File an action in civil court
    Explanation
    The correct answer is to file an action in civil court. This is because the seller has breached the contract by not paying the commission, and the real estate agent can seek legal recourse by filing a lawsuit in civil court to recover the unpaid commission. Filing a vendor's lien on the seller's property or filing a complaint with the Real Estate Commissioner may be options as well, but the most appropriate course of action in this scenario is to pursue legal action in civil court.

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  • 24. 

    Who is authorized to manage real property for the general public?

    • A certified property manager

    • A licensed real estate broker

    • An affiliate member of the California Association of Realtors

    • Any responsible adult

    Correct Answer
    A. A licensed real estate broker
    Explanation
    A licensed real estate broker is authorized to manage real property for the general public. This means they have met the necessary requirements and obtained a license to engage in real estate transactions, including property management. They have the knowledge and expertise to handle the legal and financial aspects of managing real property, ensuring that it is properly maintained, rented, and marketed. This authorization distinguishes them from other options like a certified property manager, an affiliate member of the California Association of Realtors, or any responsible adult who may not have the same level of expertise or legal authority.

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  • 25. 

    Advance fee contracts must be submitted for approval to the real estate commissioner:

    • At least five days before they are used

    • At least ten days before they are used

    • Not less than five days after they are used

    • Not less than ten days after they are used

    Correct Answer
    A. At least ten days before they are used
    Explanation
    Advance fee contracts must be submitted for approval to the real estate commissioner at least ten days before they are used. This allows the commissioner enough time to review the contract and ensure that it complies with all relevant laws and regulations. By requiring submission well in advance, it also helps to prevent any potential issues or disputes that may arise from the use of an unauthorized or non-compliant contract.

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  • 26. 

    An advance fee contract used in connection with a real estate transaction or when listing a business opportunity must include all the following, except:

    • A description of the services to be performed

    • The total amount of the advance fee to be charged to the client

    • A guarantee that the sale, lease, or exchange will be completed

    • The date the fee is to be paid

    Correct Answer
    A. A guarantee that the sale, lease, or exchange will be completed
    Explanation
    An advance fee contract is a contract that requires the client to pay a fee upfront before any services are performed. In the context of a real estate transaction or listing a business opportunity, the contract must include a description of the services to be performed, the total amount of the advance fee to be charged to the client, and the date the fee is to be paid. However, it is not necessary for the contract to include a guarantee that the sale, lease, or exchange will be completed. This is because the outcome of the transaction cannot be guaranteed and may depend on various factors beyond the control of the party providing the services.

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  • 27. 

    Someone who has been granted a "power of attorney" may not do which of the following:

    • Deed a property to himself

    • Pay himself a commission

    • Deed the property to another

    • Sign the name of his principle to legal documents

    Correct Answer
    A. Deed a property to himself
    Explanation
    A person who has been granted a "power of attorney" is legally authorized to act on behalf of someone else. However, they are not allowed to deed a property to themselves because it would be a conflict of interest and could potentially lead to misuse of their authority. This restriction ensures that the person with power of attorney acts in the best interest of the individual they are representing and avoids any personal gain or self-dealing.

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  • 28. 

    How long may a real estate licensee hold a deposit check from the buyer before it is placed in trust account, escrow, or returned to the buyer?

    • One business day

    • Three business days

    • Before close of escrow

    • A real estate license must immediately deposit the check in the broker's trust account

    Correct Answer
    A. Three business days
    Explanation
    A real estate licensee may hold a deposit check from the buyer for up to three business days before it is placed in a trust account, escrow, or returned to the buyer. This allows the licensee some time to process the transaction and ensure that all necessary paperwork and arrangements are in place before the funds are transferred.

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  • 29. 

    A salesperson runs an ad in a newspaper. The ad must contain:

    • The name and address of the salesperson

    • The name and address of the broker

    • The name of broker and name of salesperson

    • The name of the broker

    Correct Answer
    A. The name of the broker
    Explanation
    The correct answer is "the name of the broker" because the question asks for the specific information that must be included in the ad. Out of the given options, only the name of the broker is mentioned as a requirement. The other options may or may not be necessary, but the name of the broker is definitely required in the advertisement.

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  • 30. 

    Broker Wilson cheated clients in several real estate transactions and then disappeared. As a result of a lawsuit filed on one transaction a client was awarded a $25,000 judgment against broker Wilson. What is the maximum amount that client will be able to recover from the real estate education, research, and recovery account (REERRA)?

    • $20,000

    • $25,000

    • $50,000

    • $250,000

    Correct Answer
    A. $25,000
    Explanation
    Recovery is limited to $50,000 per transaction, $250,000 maximum per licensee

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  • 31. 

    When a real estate broker fires a real estate salesperson for a violation of the real estate law, the broker must:

    • Notify the Real Estate Commissioner immediately by telephone

    • Notify the Real Estate Commissioner by certified written statement of facts within three days of the termination of the licensee

    • Do nothing, it is not the responsibility of the broker to inform the Real Estate Commissioner

    • Notify the Real Estate Commissioner forthwith by a certified written statement of facts

    Correct Answer
    A. Notify the Real Estate Commissioner forthwith by a certified written statement of facts
    Explanation
    When a real estate broker fires a real estate salesperson for a violation of the real estate law, the broker is required to notify the Real Estate Commissioner immediately by a certified written statement of facts. This is necessary to inform the regulatory authority about the violation and provide them with the relevant information regarding the termination of the licensee. It ensures transparency and accountability in the industry and allows the Real Estate Commissioner to take appropriate action if needed.

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  • 32. 

    When a real estate broker is collecting payments on a promissory note for a lender as part of a loan servicing agreement, the broker may return the funds in his trust account for:

    • 10 days

    • 14 days

    • 25 days

    • 60 days

    Correct Answer
    A. 25 days
    Explanation
    In a loan servicing agreement, the real estate broker is responsible for collecting payments on behalf of the lender. The broker holds these funds in a trust account until they are due to be returned to the lender. According to the given options, the funds may be returned to the lender after 25 days. This indicates that the broker has a specific timeframe within which they must transfer the collected payments to the lender.

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  • 33. 

    A broker is required by law to keep a copy of the deposit receipt for a minimum of three years from:

    • The date the deposit receipt was accepted by the seller

    • The date of closing of the transaction

    • The recording of the deed

    • Whichever date is earliest

    Correct Answer
    A. The date of closing of the transaction
    Explanation
    A broker is required by law to keep a copy of the deposit receipt for a minimum of three years from the date of closing of the transaction. This means that the broker must retain the deposit receipt starting from the date when the transaction is officially closed. Keeping records from the date of closing ensures that the broker has access to important information regarding the transaction for a specified period as required by law.

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  • Current Version
  • Apr 07, 2024
    Quiz Edited by
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  • Apr 09, 2015
    Quiz Created by
    Ktngo

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